(Reuters) - Air Canada and six major Canadian companies are urging Ottawa to ease rules on pension plans, which they consider as too onerous, the Globe and Mail said.
Current regulations in Canada are making an already tough situation for the airline and others even worse by forcing huge increases in pension contributions by corporations, Air Canada Chief Executive Montie Brewer told the paper in an interview.
“This is not a bailout ... It’s recalibrating how the pension payments are made and how the deficit is decided,” Brewer told the paper.
Mounting pension woes are “sapping the energy of Canadian CEOs at a time when we should be growing our companies and making them healthier,” the paper cited Brewer as saying.
Air Canada effectively funnels revenue from the first four passengers boarding a plane toward pension payments, and the figure could increase to the first six travelers as the airline’s pension deficit widens, Brewer told the paper.
An industry source told the paper that the other six firms seeking reforms are Canadian Pacific Railway Ltd, Bell Canada, MTS Allstream, Canadian National Railway Co, Canada Post and Nav Canada.
The group is supported by the Federally Regulated Employers - Transportation and Communication organization, whose members include Telus Corp and the Canadian Broadcasting Corp.
Companies in a variety of sectors already had been keeping a watchful eye on their growing pension deficits or shrinking surpluses even before last year’s global financial crisis and stock market plunge, the paper said.
New measures being sought would have the effect of reducing the volatility in pension funding, according to the paper.
Reporting by Ajay Kamalakaran in Bangalore; Editing by Jon Loades-Carter